BILLS DIGEST NO. 101, 2017–18              3 May 2018

Copyright Amendment (Service Providers) Bill 2017

Jonathan Mills
Law and Bills Digest Section 

Date introduced: 6 December 2017

House:  Senate

Portfolio: Communications and the Arts

Commencement: Six months after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at May 2018.

Purpose of the Bill

The purpose of the Copyright Amendment (Service Providers) Bill 2017 (the Bill) is to amend the Copyright Act 1968 (the Act) to extend the scope of the safe harbour provisions and limit the remedies available against service providers in the disability, education and cultural sectors.

Structure of the Bill

The Bill consists of a single Schedule amending Division 2AA of Part V of the Act to extend the existing limits on the remedies available against carriage service providers to also apply to certain other service providers.

Background

Safe Harbour Protections

Certain ‘safe harbour’ protections for ‘carriage service providers’ are currently built into the Act in sections 116AA – 116AJ, so that only limited remedies are available against those providers for the copyright infringing conduct of their subscribers where the carriage service provider does not control, initiate or direct the primary infringement. The conditions that must be satisfied in order to reap the benefit of these ‘safe harbour’ protections vary depending on the particular activities that a carriage service provider engages in. The conditions include that the carriage service provider must implement reasonable policies that provide for terminating the accounts of repeat infringers, they must comply with any relevant industry codes, they must restrict access to permitted users, must expeditiously remove infringing material and must not receive a financial benefit that is directly attributable to the infringing activity.[1]

The limited remedies that are available for relevant infringements of copyright by carriage service providers are set out in section 116AG of the Act and include orders disabling access to overseas online locations and terminating a specified account, as well as orders to remove or disable access to infringing copyright material.[2] Remedies are not to include damages or an account of profits, additional damages or other monetary relief.[3]

History of reform proposals

The Government and stakeholders have been reviewing the scope of the safe harbour protections for many years, with various options for expanding the scheme being discussed and debated.

The December 2015 Exposure Draft of what became the Copyright Amendment (Disability Access and Other Measures) Bill 2017 (the Disability Access Bill) contained amendments to the safe harbour provisions intended to ‘ensure that search engines, universities and libraries have ‘safe harbour’ protection if they comply with conditions aimed at reducing online copyright infringement.’[4] However, the final version of that Bill omitted those safe harbour reforms. The Bills Digest for the Disability Access Bill explains:

The Bill currently before the Parliament is similar to the exposure draft in most respects, with the major difference being the omission of amendments to the safe harbour provisions. These provisions were the more significant and controversial of the proposed amendments in the exposure draft. Safe harbour amendments have been the subject of debate and review for over ten years with groups representing rights owners raising some objections to them. While the Explanatory Memorandum and second reading speech to the Bill make no mention of this omission, the Government has subsequently announced that it will undertake further consultation with stakeholders on the extension of the safe harbour provisions of the Copyright Act prior to introducing legislation:

‘An expanded safe harbour regime would provide a useful mechanism for rights holders to have material that infringes their copyright removed from online service providers. An expanded regime would also ensure that service providers are not held responsible for the infringing actions of their users, provided they take reasonable steps to take down material that infringes copyright. The extension of safe harbour to cover online service providers, not just internet service providers, has been the subject of inquiry and public debate for over a decade.’ [5]

The stakeholder submissions in relation to the Disability Access Bill highlighted some of the objections to expanded safe harbour protections:

The exposure draft of the Bill released for public comment was generally received well by libraries and universities… Submissions from groups representing rights owners were more cautious in their reaction and in particular were generally opposed to the amendments to the safe harbour provisions. For example the Australian Copyright Council was generally supportive of the preservation provisions for cultural institutions but expressed reservations about the provisions relating to disability access to copyright materials. The Council did not support the safe harbour provisions in the exposure draft.[6]

Last year the Minister for Communications, Senator Mitch Fifield, announced that ‘Dr Heather Smith PSM, Secretary of the Department of Communications and the Arts, would oversee a series of meetings and roundtable discussions with stakeholders on the proposed changes. The Department has been asked to provide advice to Government by early June 2017 to enable the Government to continue to progress the copyright reform process.’[7]

The Attorney-General’s Department produced a consultation paper in 2011, Revising the scope of the copyright ‘Safe Harbour Scheme’, which proposed replacing the term ‘carriage service provider’ with the broader term ‘service provider’. This paper noted that Australia’s safe harbour provisions were implemented in response to requirements in the Australia-United States Free Trade Agreement and proposed an expansion of the scheme for stakeholder consideration, as outlined in the extract below:

Expanding the scope of the safe harbour scheme

It is apparent that the current definition of ‘carriage service provider’ gives the Australian scheme a more restricted scope than equivalent safe harbour schemes in the US, Singapore and Korea. The approach these countries have taken in implementing the safe harbour scheme has been taken into consideration in developing the proposal to amend the Australian scheme.

Following the consideration of similar international schemes, and the representations made by interested parties during targeted consultation conducted by the Attorney-General’s Department in 2005, and again in response to the Government’s Digital Economy Future Directions Consultation Paper 2009, it is now proposed that the scope of safe harbour scheme in the Copyright Act be amended to cover a broader range of service providers.

To achieve this, an alternative term (‘service provider’) would replace ‘carriage service provider’ for the purposes of the safe harbour scheme. The new term would be defined to cover internet service providers and operators of online services, irrespective of whether they provide a carriage service to the public. The new term would be consistent with the Australia-United States Free Trade Agreement and comparable international approaches. Careful consideration will be given to developing a definition that it is simple and effective, technologically neutral, and consistent with Australia’s international obligations.[8]

The Attorney-General’s Department also published the Online Copyright Infringement discussion paper (July 2014) containing a suggestion for a broader expansion of the safe harbour protections ‘to entities engaged in the activities set out in sections 116AC to 116AF. This would be achieved by removing the reference to carriage service provider and replacing it with a definition of ‘service provider’, being any person who engages in activities defined in sections 116AC to 116AF.’ [9]

More recently, the Productivity Commission produced the Intellectual Property Arrangements inquiry report 2016. This report contained substantial discussions of the safe harbour scheme, and recommended that ‘(t)he Australian Government should expand the safe harbour scheme to cover not just carriage service providers, but all providers of online services.’[10]

In the Second Reading Speech for the Bill, the Government explained that it chose to implement a more limited expansion of the safe harbour scheme in this Bill, compared to the various recommendations, in what is a relatively undisputed segment of copyright use. The Government acknowledged ‘that a blanket extension of safe harbour remains a highly contested reform’[11] but noted that ‘(t)he education, cultural and disability sector generally take a very risk averse approach to protecting and managing the copyright of others… Yet they still remain potentially liable for the infringement of their users which is beyond their active control.’[12] The Second Reading Speech then went on to explain:

On the one hand we have heard that extending safe harbour would encourage piracy, contribute to the gap in revenue between subscription and ad based content services, and remove the ability for rights holders to seek licence revenue from online services. Of particular concern have been scenarios in which service providers derive profit from the infringing activities of their users.

…

On the other hand we hear that Australia has legal uncertainty about the extent to which service providers can be liable for the actions of their users, which has a chilling effect on innovation. Service providers, who in many cases perform the same role as a carriage service provider, have pointed out that they are the ones that have no protection and that this makes Australia uncompetitive compared with other countries who have a safe harbour scheme.

…

So far, opposing parties have been unable to meet in the middle of this protracted debate. So this Bill starts the process of safe harbour reform by responding to where there is broad consensus and extending the scheme to a group of institutions and organisations that all agree are responsible players in the copyright space.[13]

Committee consideration

Senate Environment and Communications Legislation Committee

The Bill was referred to the Senate Environment and Communications Legislation Committee for inquiry and report by 19 March 2018. Details of the inquiry are at the inquiry homepage.

The stakeholder submissions to this inquiry are discussed under ‘Position of major interest groups’.

In its report, the Committee recommended that the Senate pass the Bill, while also noting that the department should consider the drafting issue raised by some submitters regarding the use of ‘by’ rather than ‘by and on behalf of’ service providers.[14] This issue is discussed at the end of this digest.

The Australian Greens issued a dissenting report in which the party expressed support for ‘the incremental progress that this Bill makes in bringing Australian copyright laws up to date and in line with other countries’ but stated more broadly that they did not support the ‘piecemeal’ reform of copyright laws or the limited definition of 'service providers' in the Bill.[15] The dissenting report went on to recommend that the language relating to use ‘on behalf of’ service providers be clarified, that further reforms of copyright law be considered, and that a broader definition of service providers should be used.[16]

Senate Standing Committee for the Scrutiny of Bills

The Committee made no comment on the Bill.[17]

Policy position of non-government parties/independents

The Australian Greens' dissenting report to the Senate Environment and Communications Legislation Committee inquiry is discussed above in the section dealing with that Committee. At the time of writing no other comments in relation to the Bill had been made by non-government parties or independents.

Position of major interest groups

A range of stakeholder opinions were expressed in submissions to the Senate Environment and Communications Legislation Committee inquiry into the Bill.[18] While many stakeholders took the opportunity to further express their positions that safe harbour reforms should either go no further than the present Bill or should be expanded further to include, for example, all online services, most were otherwise supportive of the reforms contained in the present Bill.[19]

The Arts Law Centre of Australia noted concerns ‘at the burden placed on rights holders to monitor and issue take down notices relating to the reposting of infringing content once a take down notice has been issued’ and urged ‘Government to consider mechanisms to better balance this burden with a positive requirement on the service providers’.[20]

Financial implications

The Government has stated that the Bill will not have any significant financial implications.[21]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[22]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights considered that the Bill did not raise any human rights concerns.[23]

Key issues and provisions

Item 6 introduces proposed section 116ABA which provides a definition of service provider. This term is then proposed to be used throughout Division 2AA of Part V of the Act in place of the existing term carriage service provider to limit the remedies that are available against said providers for infringements of copyright that relate to the carrying out of certain online activities by them.

A service provider is defined by proposed subsection 116ABA(1) to be:

•       a carriage service provider

•       an organisation assisting persons with a disability or

•       a body administering a public library or parliamentary library, an archives, a key cultural institution or an educational institution.[24]

Proposed subsection 116ABA(2) provides that for bodies administering a library, archives, key cultural institution or non-incorporated educational institution the safe harbour provisions only apply to activities that the service provider carries out because of its relationship to the relevant library, archives, key cultural institution or educational institution.

Note that the proposed definition retains the sub group of carriage service providers that are covered under the existing provisions of Division 2AA.

Items 1, 2, 4 and 7 consequently omit the word ‘carriage’ from any occurrence of the term ‘carriage service provider’ in Division 2AA. Specifically, the term is removed from the heading to Division 2AA, subsection 116AA(1), section 116AB and sections 116AC to 116AJ. This reflects the expansion of the scope of the provisions from carriage service providers to the proposed group of service providers, as defined in proposed section 116ABA.

Possible drafting issues

The Intellectual Property Committee of the Business Law Section of the Law Council of Australia (IPC) raised several potential drafting issues with the Bill in its submission to the Senate Environment and Communications Legislation Committee.[25] In particular, the IPC noted that the wording of proposed section 116ABA may be ambiguous as regards which ‘entities it intends to include within the definition of "service providers”, and which activities’.[26]

The IPC also raised concerns over whether the Bill would achieve its purpose as many of the activities conducted by the institutions it seeks to protect may be carried out by external providers. The IPC suggested:

(a)n alternative would be to include in the safe harbour activities done “by or on behalf of” the institutions intended to be covered by the safe harbour. Such drafting would allow public interest organisations to innovate entirely in-house, but also then use services and products developed in the private sector.[27]

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Copyright Act 1968, subsection 116AH(1).

[2].              Ibid., subsections 116AG(3) and (4).

[3].              Ibid., subsection 116AG(2).

[4].              Department of Communications and the Arts (DCA), ‘Updating Australia’s copyright laws’, DCA website.

[5].              MA Neilsen, Copyright Amendment (Disability Access and Other Measures) Bill 2017, Bills digest, 96, 2016–17, Parliamentary Library, Canberra, 2017, pp. 3–4, quoting M Fifield (Minister for Communications), Further consultation on copyright safe harbour legislation, media release, 21 April 2017.

[6].              MA Neilsen, op. cit., pp. 4, 5.

[7].              M Fifield, Further consultation on copyright safe harbour legislation, op. cit; the Department of Communications and the Arts (DCA) also maintains a webpage on the topic, ‘Further consultation on safe harbour legislation’, DCA website.

[8].              Attorney-General’s Department, Revising the scope of the copyright ‘Safe Harbour Scheme’, Consultation paper, 2011, pp. 4, 5.

[9].              Australian Government, Online copyright infringement, Discussion paper, July 2014, p. 7.

[10].              Productivity Commission, Intellectual property arrangements, Inquiry report, 78, 2016, pp. 563–7.

[11].              J McGrath, ‘Second reading speech: Copyright Amendment (Service Providers) Bill 2017’, Senate, Debates, 6 December 2017, p. 9904.

[12].              Ibid., p. 9903.

[13].              Ibid., p. 9904.

[14].              Senate Environment and Communications Legislation Committee, Copyright Amendment (Service Providers) Bill 2017, The Senate, Canberra, March 2018, pp. 21, 22.

[15].              Australian Greens, Dissenting report, Senate Environment and Communications Legislation Committee, Copyright Amendment (Service Providers) Bill 2017, The Senate, Canberra, March 2018, p. 23.

[16].              Ibid., pp. 32, 33.

[17].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 1, 2018, The Senate, 7 February 2018, p. 16.

[18].              Senate Environment and Communications Legislation Committee, Copyright Amendment (Service Providers) Bill 2017, The Senate, Canberra, submissions.

[19].              For example see Australian Publishers Association, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the Copyright Amendment (Service Providers) Bill 2017, [submission no. 17], 30 January 2018; Optus, Submission to the Senate Environment and Communications Legislation Committee, Inquiry into the Copyright Amendment (Service Providers) Bill 2017, [submission no. 13], 30 January 2018; Google Australia, Submission to the Senate Environment and Communications Legislation Committee, Inquiry into the Copyright Amendment (Service Providers) Bill 2017, [submission no. 24], 30 January 2018.

[20].              Arts Law Centre of Australia, Submission to Senate Environment and Communications Legislation Committee, Inquiry into the Copyright Amendment (Service Providers) Bill 2017, [submission no. 3], January 2018.

[21].              Explanatory Memorandum, Copyright Amendment (Service Providers) Bill 2017, p. 2.

[22].              The Statement of Compatibility with Human Rights can be found at pages 3–4 of the Explanatory Memorandum to the Bill.

[23].              Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 1, 16 February 2018, p. 78.

[24].              As set out in proposed subparagraph 116ABA(1)(c)(i) a public library is a library accessible to members of the public directly or through interlibrary loans.

[25].              Business Law Section of the Law Council of Australia, Submission to the Senate Environment and Communications Legislation Committee, Inquiry into the Copyright Amendment (Service Providers) Bill 2017, [submission no. 35], 31 January 2018.

[26].              Ibid., p. 2.

[27].              Ibid., p. 3.